HTSC·2025-05-21 10:58Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 5.43 [9][10]. Core Insights - The company reported a total revenue of RMB 16.3 billion for 2HFY25, representing a year-on-year growth of 16.0%, which exceeded the consensus expectation of 12.6%. However, the adjusted net profit of RMB 970 million was below the expected RMB 1.1 billion, indicating that future profit growth will rely on organic business growth as the impact of advertising business integration diminishes [1][2]. - The management has set a revenue growth target of 5-10% for FY26, with an adjusted net profit growth target of 10-20%. The focus will be on enhancing merchant empowerment and user experience in core businesses while exploring new growth avenues in innovative sectors like medical AI [4][5]. Revenue and Profit Forecast - The company’s revenue is projected to reach RMB 33.6 billion in FY26, with a year-on-year growth rate of 9.9%. The adjusted net profit is expected to be RMB 2.2 billion, reflecting a growth rate of 17.6% [14][16]. - The adjusted net profit margin is forecasted to improve to 6.8% in FY26, up from previous estimates, indicating better operational efficiency [14][15]. Business Segments Performance - The self-operated business generated RMB 14 billion in revenue for 2HFY25, a year-on-year increase of 13.9%, outperforming the consensus estimate of 9.1%. The e-commerce platform business saw revenue of RMB 1.9 billion, growing 43.6% year-on-year, although it fell short of the expected 57.7% growth [2][3]. - The management highlighted that the integration of advertising business has enhanced service capabilities for platform merchants, leading to improved operational returns and competitiveness in the pharmaceutical e-commerce sector [2][3]. Valuation and Market Position - The company is assigned a target non-IFRS PE of 35x for FY26, which is a premium compared to the average of 16.2x for comparable companies, reflecting the company's ongoing market share acquisition and potential in medical AI [5][16]. - The target price has been revised to HKD 5.43 from a previous value of HKD 4.4, indicating a positive outlook based on the company's growth trajectory and market positioning [5][16].